Vivo Energy plc Q1 Trading Update Presentation 30 April 2020 - - PowerPoint PPT Presentation

Vivo Energy plc Q1 Trading Update Presentation

30 April 2020

Disclaimer

IMPORTANT: Please read the following before continuing. No offer or solicitation This presentation is provided for informational purposes only and is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities of Vivo Energy plc (the “Company”) or a solicitation of any vote of approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Neither the contents of the Company’s website, nor the contents of any other website accessible from hyperlinks on such websites, is incorporated herein or forms part of this presentation. Forward-looking statements This presentation includes forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Company’s control and all of which are based on the Directors’ current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as: “believe”, “expects”, “may”, “will”, “could”, “should”, “shall”, “risk”, “intends”, “estimates”, “aims”, “plans”, “predicts”, “continues”, “assumes”, “positioned”, “anticipates” or “targets” or the negative thereof, other variations thereon or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this report and include statements regarding the intentions, beliefs or current expectations of the Directors or the Group concerning, among other things, the future results of

• perations, financial condition, prospects, growth, strategies of the Group and the industry in which it operates.

No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Group. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed, or implied in such forward-looking statements. Such forward-looking statements contained in this report speak only as of the date of this report. The Company and the Directors expressly disclaim any obligation or undertaking to update these forward-looking statements contained in the document to reflect any change in their expectations or any change in events, conditions, or circumstances on which such statements are based, unless required to do so by applicable law.

1

Q1 Highlights

 Q1 Gross cash profit of $179 million, up 6% year-

• n-year

 January and February saw +20% gross cash profit

growth1

 Volumes in last two weeks of March affected by

COVID-19 related measures

 Margins impacted in March primarily due to the

impact of the reduction in demand and valuation

• f stocks

Three months ended 30 March 2020 2019 Change Volumes (million litres) 2,602 2,441 +7% Gross Cash Unit Margin ($/’000 litres) 69 69

• Gross Cash Profit

($ million) 179 169 +6%

KEY PERFORMANCE INDICATORS1 2

(1) Includes benefit of 2 additional months of Engen contribution compared to 2019

COVID-19 Related Restrictions on Movement1

MALI Curfew since 26 Mar CÔTE D’IVOIRE Curfew since 23 Mar BURKINA FASO Curfew since 21 Mar GHANA Urban restrictions removed 20 Apr SENEGAL Curfew since 23 Mar MOROCCO 20 Mar – 20 May CAPE VERDE 27 Mar – 2 May MOZAMBIQUE State of emergency since 19 Mar

3

Overall volume running at around half of expected levels, and will fluctuate dependent on restrictions in place

BOTSWANA 2 Apr – 7 May GABON Partial lockdown since 13 Apr NAMIBIA Partial lockdown since 24 Mar TUNISIA 23 Mar – 4 May UGANDA 31 Mar – 5 May MADAGASCAR Curfew since 23 Mar KENYA Partial lockdown since 25 Mar RWANDA 21 Mar – 30 Apr GUINEA Curfew since 1 Apr MALAWI Partial lockdown since 18 Apr2 ZAMBIA Schools closed 25 Mar REUNION 17 Mar – 11 May ZIMBABWE 27 Mar – 1 May MAURITIUS 18 Mar – 4 May TANZANIA Schools closed 23 Mar

Countrywide Lockdown Curfew / Partial Lockdown Social Distancing3

(1) Subject to change and potential extensions (2) Full lockdown imposed on 18 April, but was delayed subject to a court process (3) Measures within each country vary and include closure of schools, borders, limitations on movement and large gatherings

 Travel ban imposed from January  Range of preventive and protective health and

safety measures implemented

 Supporting dealer network to protect local jobs  Rolling out new initiatives for customers

Some examples of great innovative thinking What we are doing to respond

PROTECTING OUR PEOPLE AND CUSTOMERS SUPPORTING OUR COMMUNITIES 4

Morocco Funding production of 400 respirators & providing free fuel for healthcare workers Zambia Donation of 60 boxes of sanitiser, and 2,000 litres of fuel to the Zambia National Public Health Institute Kenya Produced & gifted thousands

• f

bottles

• f

sanitiser for the Government of Kenya Uganda Donated 5,000 litres to emergency medical care services Tunisia Partnering with a local organisation to

• ffer innovation camp programmes
• nline for students

Mitigating Actions

5 PROTECTING OUR BUSINESS



Our business model drives a lean cost base



Total headcount of ~2,700 people across 23 countries



Reducing discretionary spend around marketing and uncommitted capex

 Reducing supply of fuels to balance lower demand  Closely monitoring credit exposures  Prudent decision to withdraw recommendation of the payment of the 2019 final dividend



Will consider an additional dividend payment once more certainty in our markets

Liquidity

6

 Strong balance sheet and access to liquidity  $1.6 billion of available liquidity as at the end of March



Undrawn committed multi-currency revolving credit facility of $238 million



Total of $1.0 billion undrawn unsecured short-term bank facilities within our 23 operating entities



Cash balances of $353 million (spread between the HoldCo and the OpCos)

 Average utilisation rates of short term facilities approximately 30% at the end of March  Long-term debt principal repayments of $82 million due in 2020 – covered by cash on hand in HoldCo

Context - COVID-19 in Africa

7

Reported COVID-19 Cases in Operating Units

8

>1,000 cases 500-1,000 cases 1-500 cases

(1) Source: John Hopkins University – 29 April

Governmental Responses – Major Operating Units1

9

Fiscal Response Monetary Response

Morocco

Creation of a special fund dedicated to the management of the pandemic of ~2.7 percent of GDP. Supporting employees who become unemployed. All businesses can defer social contribution payments until June 30 and payments to Government suppliers will be accelerated. The central bank reduced the policy rate by 25 bps to 2.0

• percent. Loan payments are suspended for small and medium-

sized businesses and self-employed people until June 30.

Tunisia

A 2.5 billion TND emergency plan ($0.71 billion or 1.8 percent of GDP) announced included the postponement of CIT payments, other taxes and social contributions, VAT exemptions, and others in order to provide liquidity to the private sector, limiting layoffs and protecting the most vulnerable population. The BCT has reduced its policy rate in March by 100 bps and announced a package to support the private sector, by asking banks to defer payments on existing loans and suspend any fees for electronic payments and withdrawals.

Kenya

The government has earmarked Ksh40 billion (0.4 percent of GDP) in funds for additional health expenditure, social protection and cash transfers; food relief; and funds for expediting payments of existing obligations to maintain cash flow for businesses during the crisis. A package of tax measures has been proposed including tax relief and lower VAT. On March 24, the central bank lowered its policy rate by 100 bps to 7.25 percent. The central bank has also encouraged banks to extend flexibility to borrowers’ loan terms based on pandemic-related circumstances

Cote D’Ivoire

The government announced a package of economic measures for the most vulnerable segments of the population through agricultural input support and expanded cash transfers, provide relief to hard-hit sectors and firms, and support public entities in the transport and port sectors to ensure continuity in supply chains. The regional central bank (BCEAO) for the West-African Economic and Monetary Union (WAEMU) announced measures to pre-qualify1,700 private companies for refinancing and a framework inviting banks to accommodate demands from firms with Covid19-related repayment difficulties

(1) Source: IMF – Policy Tracker

10

Fiscal Response Monetary Response

Ghana

The government committed US$100 million to support preparedness and response, and about US$210 million under its Coronavirus Alleviation Programme to the promotion of selected industries, the support of SMEs and employment, and the creation of guarantees and first-loss instruments. Cut the policy rate cut by 150 basis points to 14.5 percent on March 18, and announced several measures to mitigate the impact of the pandemic shock

Senegal

Set out an economic support package of FCFA 186 billion including food aid and medical supplies; utility payments and targeted support to hard-hit sectors such as tourism and transport; and an expedited payment of unmet obligations will help affected firms. On the tax side, postponing tax payments will improve liquidity of enterprises and their balance sheets will profit from a partial write-off of tax debt. The regional central bank (BCEAO) for the West-African Economic and Monetary Union (WAEMU) announced measures to prequalify1,700 private companies for refinancing and a framework inviting banks to accommodate demands from firms with Covid19-related repayment difficulties

Mauritius

The authorities have announced a range of other fiscal support measures including an additional Rs 4 billion (0.8 percent GDP) in spending/financing used to support troubled firms, and provide

• credit. The government will also introduce a Wage Support

Scheme to provide financial support to employees The Bank of Mauritius (BOM) reduced the Key Repo Rate from 3.35 percent to 2.85 percent and announced six-month moratorium on household loans at commercial banks and a Special Foreign Currency (USD) Line of Credit ($300 million)

Uganda

The government announced a package of measures including a food distribution campaign; expedited repayment of domestic government arrears to the private sector; boosting the lending capacity of the state-owned Uganda Development Bank; the deferment of tax payment obligations; the support with utilities and the expansion of labor-intensive public works programs. Bank of Uganda has reduced the central bank rate by 1% to 8% and put in place a commitment to provide exceptional liquidity assistance for a period of up to one year to financial institutions that might need it and putting in place a mechanism to minimise the likelihood of sound business going into insolvency due to lack of credit

Governmental Responses – Major Operating Units1

(1) Source: IMF – Policy Tracker

International Financial Support for Africa1

11

 The World Bank plans to provide emergency support of $18bn in 2020 to African countries  The IMF has increased access to two emergency facilities, the Rapid Credit Facility, and the Rapid Financing

Instrument as well as Catastrophe Containment & Relief Trusts



14 operating countries have accessed IMF funding in April2

 The IMF also cancelled 6 months of debt payments for 19 African countries, including Burkina Faso, Guinea,

Madagascar, Malawi, Mali, Mozambique and Rwanda

 The G20 has suspended debt service payments for the poorest countries through to the end-2020  EU and African Development Bank have pledged $5bn and $8bn for support, respectively

(1) Source: IMF and World Bank Background Note for Mobilizing with Africa High-Level Virtual Event (17 April) (2) https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker#AFR

Potential Economic Impact from COVID-19

12

 The IMF changed its Sub-Saharan Africa GDP forecasts from growth of 3.1% to a contraction of 1.6%1



Impact will vary by each country’s dependence on oil, natural resources and tourism

 Forecasting a rebound to 4.1% growth in 2021, but dependent on duration of crisis

IMF FORECASTS FOR SUB-SAHARAN AFRICA – REAL GDP GROWTH 2019-2020

(1) Source: IMF Sub-Saharan Africa (SSA) Regional Economic Overview – April 2020